Australia to Release Crypto-ETF, but here’s the Catch!

Key Takeaways

  • Betashares, an Australian provider of exchange-traded funds (ETFs) and other ASX-traded funds, is set to launch the “BetaShares Crypto Innovators ETF,” with the ticker code “CRYP” on ASX.
  • However, it will not invest directly in cryptocurrencies such as Bitcoin, Ethereum, etc.
  • The Australian Securities and Investments Commission is finalising a consultation process to explore the potential for cryptocurrency ETFs to trade on the local bourse.
Australia is to Release its First Crypto-ETF
Australia is to Release its First Crypto-ETF

ASX is home to numerous exchange-traded funds (ETFs). There are ETFs for crude oil, gold, silver, platinum and palladium exposure. ASX ETFs also cover cash, property and government bonds. There’s one glaring exception, ie. Cryptocurrency, but not anymore. Australian retail investors currently get access to bitcoin via exchanges based offshore, such as Binance, which was banned from operating in Britain earlier this year, and local players like Independent Reserve and CoinJar.

Betashares, an Australian provider of exchange-traded funds (ETFs) and other ASX-traded funds, is set to launch the “BetaShares Crypto Innovators ETF,” with the ticker code “CRYP” on ASX.

However, there is a catch. This ETF will not invest directly in cryptocurrencies such as Bitcoin, Ethereum (CRYPTO: ETH), or Dogecoin (CRYPTO: DOGE). Instead, it will concentrate on the “global companies driving the rapidly growing crypto economy”, as per the company’s announcement. It also mentioned that CRYP will “aim to track an index comprising a focused portfolio of more than 30 leading crypto innovators.” These include Coinbase, a top cryptocurrency exchange, Riot Blockchain, a Bitcoin mining company, and Michael Saylor‘s MicroStrategy Incorporated.

Alex Vynokur, the chief executive officer at Betashares, stated that the new ETF would target crypto companies, corporations with significant cryptocurrency holdings on their balance sheets, and diversified companies with crypto-focused business lines. 

“I would love for the index to include Australian businesses, and there are a number of Australian businesses that could potentially be very well-suited.”

Mr Vyonkur

Winokur further stated that,

The crypto economy is highly dynamic and growing rapidly and is built using exciting and disruptive technology. CRYP will take a ‘pick and shovel’ approach to the crypto sector, investing in the companies that are driving the crypto economy.”

Australian exchanges have been vocal in need for custody rules to protect investors. Overseas operators can introduce risk given the crypto holdings are based offshore, and legal protections are unclear.

The Australian Securities and Investments Commission is finalising a consultation process to explore the potential for cryptocurrency ETFs to trade on the local bourse.

Last month, Australian Securities and Investment Commission chair Joseph Longo expressed concerns to the House of Representatives about the lack of regulation and legislation surrounding crypto-based assets.
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